State Tax Rulings
Free state tax letter rulings and advisory opinions with plain-English summaries, full citations, and the original source on every page.
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Can an operator buy coin-operated amusement devices like pinball machines tax-free under the resale exemption?
No. Purchasing a coin-operated or other amusement device (pinball machines, music machines, mechanical/electronic games) to generate admission or use-fee revenue is a taxable retail purchase, not a…
Is the film used to create a template for burning circuit boards exempt from Texas sales tax, and are fees paid to programmers for custom software taxable?
Both are tax-favorable for the taxpayer: the film qualifies for the manufacturing exemption under Tax Code Section 151.318 because it is used by a third-party custom manufacturer to produce circuit…
Is selling pooled telephone survey data taxable in Texas, and does modifying that data for a specific client change the answer?
Yes, it's taxable either way. The Comptroller ruled that selling pooled telephone survey information to a specific client without modification is a taxable transaction, that modifying the pooled…
When a company reorganizes its subsidiaries and transfers assets between them, does the timing of the transfer (during business hours vs. after hours) affect whether the occasional sale exemption applies?
Yes — the timing matters. The Comptroller advised that if the assets of subsidiaries A and B are transferred to new subsidiaries D and E during business hours, when the transferred segment has both…
Is cement — Portland or Masonry, including white cement — exempt from Texas sales tax, and what about concrete made from it?
Cement, whether Portland or Masonry (including white cement), is exempt from Texas sales tax under the specific exemption in Texas Tax Code Sec. 151.308(a)(4), so no sales tax should be collected on…
How did Florida sales tax apply to a $1 monthly sublease, optional tenant improvements, and the authority's $1 annual head lease?
The tenant owed 6 cents of sales tax on each $1 monthly rent payment. Optional improvements made solely for the tenant's benefit were not rent because the lease did not require them or terminate…
Could a subsequent purchaser's vehicle remain a 'new motor vehicle' for Lemon Law purposes while the transferable new-car warranty remained usable?
Yes. California said the vehicle retained that status while the subsequent purchaser could use the express warranty and repair facilities like the original buyer.
Does an inactive corporation that was dissolved by proclamation, but still holds bare legal title to New York real property as a nominee, owe Article 9-A franchise tax?
It depends on the period. W.R.H.R.E. Corp. was formed in 1973 only to hold bare legal title to a Port Washington property so a lender could take a mortgage; it never did business, kept no books, had…
Does Utah sales tax apply to oil and gas well fracturing, acidizing, and stimulation services, even if the vendor separately states the chemical materials and tax on its billing?
No sales tax applies to oil and gas well fracturing, acidizing, and stimulation services, following a controlling Utah Supreme Court decision holding that the essence of these services is a service,…
How did Kansas say an antique motor vehicle should be registered and taxed for property-tax purposes?
Kansas said highway registration and property-tax registration were separate. Antique vehicles at 12,000 pounds or less and recreational vehicles were generally taxed when tagged; other…
Were contraceptives, suction and urinary catheters, and irrigation syringes taxable medical items?
Contraceptive creams, foams, jellies, and suppositories qualified; nonspecific suction catheters and irrigation syringes were taxable, with exceptions for certain catheters.
Did beneficiaries or trustees owe Florida intangible tax where beneficiary powers were limited and the trusts barred Florida trustees?
No. The beneficiaries could not revoke the trusts, invade corpus, or exercise an unlimited appointment power. The trust terms also barred individual Florida-resident trustees and corporate trustees…
Could a corporate group keep its Florida consolidated-return election after a proposed federal reverse acquisition and change in U.S. parent?
It depended on the federal result, which the Department could not determine from the submission. If Company C's federal consolidated group continued, its Florida filing could continue. If it ended,…
Was Florida documentary stamp tax due when a new Florida holding company's stock was authorized in Florida but physically issued by an out-of-state transfer agent?
No. Section 201.05 taxed original stock only when issued in Florida. Although the holding company's directors authorized the issuance in Florida, the transfer agent physically handled and issued the…
Was a removable experimental fuel-cell system installed under a federal demonstration contract machinery sold to the government or a taxable fixture?
It was a fixture. Bolting and integration with the plant's steam and electrical systems made the contractor the consumer under a federal construction contract.
Could a print broker use its client's bulk-mail permit, how was camera-ready art taxed, and what happened to excess printed copies?
The client's permit was acceptable if all exemption rules were met; camera-ready art remained taxable, while excess copies were taxed according to disposal, gift, contract, or sale.
Were anti-embolism stockings and external compression systems exempt medicines in California?
The stockings were normally exempt prosthetic devices if they worked separately, but not if they were only machine components. The external pump, sleeve, tubing, and related compression-system parts…
Could an unlicensed business still be a construction contractor for California sales and use tax purposes when it furnished and installed fixtures?
Yes. Contractor licensing did not control the tax classification; the business acted as a construction contractor because it furnished and installed fixtures.
Can an out-of-state retailer that ships goods into Texas only to have them forwarded out of the country claim a use tax exemption for temporary storage?
Yes. The Comptroller told the taxpayer that the Mexican Navy may issue an exemption certificate to CORP A claiming the temporary storage exclusion under Texas Tax Code Section 151.011(f), because…
Does a company owe sales tax when it just removes software from one computer and installs it on another, and does exempt-program modification also cover editing that computer's autoexec.bat and config.sys files?
No tax is owed. The Comptroller's Tax Policy Division advised that simply removing software from one computer and installing it on another does not constitute remodeling of tangible personal…
If a motor vehicle repair shop charges one lump-sum price for an oil and filter change (with no separate charge for the oil and filter), does it owe sales tax on that charge to the customer?
No. Labor to repair or maintain a motor vehicle is not taxable, and a shop that charges a single lump-sum price for an oil and oil filter change (with no separately stated materials charge) is a…
Could a married California taxpayer claim head-of-household status when the taxpayer's spouse was a nonresident alien?
Yes, if the taxpayer personally was not a nonresident alien during any part of the year and otherwise met the head-of-household requirements. A spouse's nonresident-alien status could make the…
Did a licensing agent make taxable artwork sales when it supplied finished art to licensees as part of royalty-based agency services?
Yes. The artwork was not incidental to the licensing services; tax applied to its fair retail selling price, and a proposed five-point commission increase was taxable artwork receipts.
Did broad contract clauses transferring advertising materials and layouts to a client make an agency's preliminary-art charges taxable?
Yes. Read as a whole, the clauses transferred preliminary art to the client, and the agency did not overcome the presumption that its receipts were taxable.
Were physical artwork transfers taxable when an intellectual-property licensing agent supplied designs to licensees without separately charging for them?
Yes. The artwork was a sale rather than merely incidental to licensing services, so tax applied to its fair retail selling price or the extra fee paid for it.
How did Florida documentary stamp and intangible taxes apply to a multi-step mortgage refinancing, cross-collateralization, partnership transfer, merger, and assumption plan?
Qualifying note and mortgage assignments and renewals were exempt from documentary stamp and intangible tax. Cross-collateralization owed documentary stamp tax on each stated recovery amount but no…
Could a certificate titled 'State Resale Certificate' make dental x-ray film nontaxable when it certified only export and the buyer took California delivery?
No. The certificate did not certify resale, and California delivery defeated export treatment; even a qualifying export required retained proof.
How did California tax alarm equipment, installation, and monitoring under a 36-month furnish-install-monitor contract that retained title until payment?
The installed alarm fixture was a retail sale despite retained title. Its stated or deemed price was taxable, but monitoring and installation charges were excluded.
Is a qualifying cogeneration facility exempt from the section 189 gas-importer tax on the natural gas it imports to make electricity and steam for its thermal energy host?
Yes, in part. Buffalo Power Corporation -- a wholly owned subsidiary of, and located on the same premises as, its thermal energy host Buffalo Paperboard -- would be a qualifying cogeneration…
Are a New York shortline railroad's gross earnings from hauling freight wholly within New York, as a connecting carrier on a trip that begins or ends outside the state, included in section 184 gross earnings?
No. A New York shortline railroad that carries freight only within New York as a connecting carrier -- but on a through trip that originates or terminates outside New York via another railroad --…
Were Utah-origin round-trip bus charters crossing state lines taxable, and how was tax handled when the tour company hired another bus operator?
Utah treated round-trip passenger charters from Utah to out-of-state destinations as exempt interstate transportation. Trips that stayed within Utah followed the state's taxable intrastate-trip…
Did California use tax apply when NASA paid for steel outside California and took title before the contractor fabricated and brought the wind-tunnel parts into the state?
No. Federal title vested outside California before entry, so later installation involved government-owned property rather than contractor use incident to ownership.
Is an electronic bulletin-board service that lets banks and warehouse lenders transmit loan data and files to each other's private mailboxes taxed as telephony/telegraphy, and are its interstate messages exempt?
Yes, the whole service -- licensing fees plus usage/file-transfer charges -- is taxable as a telephony/telegraphy service, since it functions as a message-switching network transmitting signals…
If my spouse rents a New York City apartment in her own name, pays for it herself, and I never use it or have a key to it, does that apartment make me a New York City statutory resident even though I also work in NYC and spend more than 183 days a year there?
No. New York City statutory residency under NYC Administrative Code § 11-1705(b)(1)(B) requires that the individual himself maintain a permanent place of abode in NYC. Where the wife alone rents the…
Were cellular-equipment sales exempt when a California agency paid 90% with federal transit funds and end users paid the other 10%?
No. Neither the state agency nor end users were the United States, so the entire price was taxable despite federal funding. Required above-market service charges also entered taxable gross receipts.
Was a separately billed performance bond taxable when a fire-truck buyer required the seller to obtain it?
No. Because the seller would sell the truck without the bond and the buyer imposed the requirement, California treated the bond like an optional warranty.
Were rentals taxable when a company bought database diskettes tax-paid and licensed the same disks for a fixed term with mandatory return?
No, if the same-form disks were leased for a fixed term and acquisition tax was paid or timely reported; customer rent was then untaxed.
What did the 1995 internal Comptroller memo say about whether inventory counting services are taxable data processing services?
This is NOT a taxpayer-specific letter ruling — it's an internal February 23, 1995 audit memo from Ledford Kelly (via Harold Lee, Audit Headquarters) telling all managers, supervisors, and auditors…
Can an aircraft engine and components/accessories overhaul company claim the sales tax electricity exemption for processors, or is what it does considered repair instead?
No — the company cannot claim the electricity exemption, because the Comptroller determined it is a repairer, not a processor. The company restores existing turbine engines and components to as…
Did Utah rule that a subsidiary's purchase and later sale of satellite equipment to its parent qualified for the resale exemption during temporary Utah storage?
No substantive ruling was issued. The company argued that its wholly owned subsidiary bought satellite equipment for resale to the parent, making temporary Utah storage exempt. The Commission said…
Could a buyer's later seller's permit validate resale purchases made while its old permit was inactive?
No. A resale certificate required a valid permit at the time, permits could not be backdated, and reimbursement was proper unless actual resale was separately proved.
Is a lump-sum charge to repair a motor vehicle tire, such as fixing a flat or retreading a customer's own tire casing, subject to Texas sales tax?
No. A lump-sum charge to repair a motor vehicle — including a flat tire repair or retreading a customer's own tire casing — is not taxable; the repair person instead owes tax on the materials and…
When did a 1995 California letter treat photograph retouching, restoration, and replacement-print charges as taxable?
The letter taxed retouching a new photograph and the full charge for making a new print. It excluded only labor that repaired and returned the customer's same used, damaged photograph. Its other…
Was the full charge taxable when a photo-restoration business digitally altered a customer's image and sold a newly produced print?
Yes. The letter treated the digitally altered image and finished print as a new taxable print, not repair and return of the same used photograph, so the entire customer charge included the…
How was later delivery of software media taxed after reproduction rights and program data had already transferred electronically?
No tax if the contract required the media at no extra charge; a later additional payment for functional media was taxable, as was other transferred property.
Is translating documents (assembly instructions, labels, tags, price lists, and legal documents) from English to Spanish a taxable service in Texas?
No. The Comptroller's Tax Policy Division ruled that translation services — translating assembly instructions, labels, tags, price lists, and legal documents from English to Spanish — are not…
If a nonresident donates valuable objects and volunteers uncompensated time to help build and equip a charitable museum located in New York, can those donations and activities be used as evidence that he is domiciled in New York?
No. Tax Law § 605(c), enacted in 1994, provides that charitable contributions, gifts, donations, loans, or uncompensated volunteer time given to a tax-exempt § 501(c)(3) organization cannot be used…
Could a nonprofit FCC-licensed radio network exempt master-tape production charges and equipment used for radio and syndicated television production?
The master tapes and production services qualified for the partial exemption even though the network was nonprofit. But its FCC radio license made its motion-picture, video, and sound-recording…
Were nonprofit youth groups selling fundraising merchandise on their own account or as the supplier's agents?
They were the supplier's agents because the supplier failed the own-account presumption; the supplier was the retailer and tax was measured by ultimate-customer payments.
For an interior designer/decorator in the Houston area, what local sales tax rate applies, and how is tax collected on wallpaper, drapery/blinds, carpet, delivery charges, and painting labor depending on whether the work is new construction, residential repair/remodeling, or nonresidential repair/remodeling, and whether the invoice is lump-sum or separately stated?
The Comptroller confirmed the local tax rates for Houston (8.25%), Katy (8.25%), and Sugar Land (7.75%), explained that interstate deliveries are exempt from Texas tax, and then walked through eight…
Is a company taxable on its services when it acts as an intermediary reviewing medical bills and charges submitted by health care providers to insurance companies?
Yes, it is taxable. The Comptroller confirmed that when a company is contacted by insurance companies or health plan administrators to act as an intermediary reviewing and clarifying charges and…
Is 'guniting' an existing in-ground concrete swimming pool -- coating it with marble dust to extend its life 10-15 years -- an exempt capital improvement, or a taxable repair?
Taxable repair, not a capital improvement -- even though the coating substantially prolongs the pool's useful life, it's treated the same as a similar protective coating applied to storage tanks in…
Across six different electronic-forms-business transactions -- paper-to-digital conversion, resold software, a licensed forms-development system, maintenance contracts, management contracts, and consulting -- which charges does a business forms company owe New York sales tax on?
Conversion services (scanning a form to a disc, or designing one) are taxable as tangible personal property when the company supplies the disc, but a taxable fabrication SERVICE instead when the…
Were materials and equipment rentals for a city stadium renovation exempt as direct government purchases?
Materials were exempt when the city issued its own purchase orders, was invoiced and paid vendors directly, took title on receipt, and bore the risk of loss. Equipment rented to contractors or…
Were accepted packaging-design concepts taxable property or nontaxable design services and preliminary art?
They were taxable at the full amount received because clients obtained title and used the physical designs; the preliminary-art exclusion also failed because title passed and charges were not separate.
Could a uniform manufacturer avoid tax on rents by moving finished uniforms to a rental division or selling them to a related rental subsidiary?
A same-company division could not; rents were taxable. A separate subsidiary could elect tax on cost only if the related sale was genuine and priced to include all costs and overhead.
Were packaging shapes and graphic surfaces taxable when clients received exclusive ownership of accepted design concepts without a separate preliminary-art charge?
Yes. Clients bought tangible packaging concepts for their own use, title passed, and no preliminary-art charge was separately stated; the negligence penalty was waived.
Can a software manufacturer use resale/exemption certificates for manual production costs, software localization, and licensed fonts/tools/clip art, and do programmers' computers count as manufacturing equipment?
Mostly yes, with one question left open. The Comptroller ruled that a software manufacturer's charges for typesetting, desktop publishing, artwork, translation/localization, and packaging graphics…
How should a bank-related service corporation source fees for Florida's corporate-income-tax sales factor?
The company was not a financial organization merely because it performed bank-related services. Florida approved an alternative method: net fees from Florida customers went in the numerator, and all…
Which mandatory charges for installing prewritten software and converting customer data were taxable?
Actual installation and operational testing were excluded. Required data conversion was not installation and remained part of the taxable software sale.
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